State Requests Federal Approval for Case Mix Change

The Department of Health (DOH) has requested federal approval to alter the methodology used to adjust the direct component of the Medicaid rate for acuity. The State Plan Amendment (SPA), dated June 28, 2019, is available here.

Members will recall that based on the 2019-20 State Budget agreement, DOH is changing the way that the case mix index (CMI) is calculated starting with July 2019 rates to include all Minimum Data Set (MDS) assessments. DOH has indicated that the new methodology will average the CMI scores of all MDS assessments submitted by a home during the period Aug. 8, 2018 through March 31, 2019. An MDS filed during that period will be used in the calculation whether the resident remains in the home or is discharged. DOH will only use MDS assessments showing Medicaid as the payer (including Medicaid-pending and Medicaid managed care) and only those that collect sufficient information to allow a RUG category to be assigned.

In the SPA, the State requests federal approval not only to use this methodology for July 2019 rates, but also to continue the methodology for future rate periods. The case mix for January 2020 rates would be based on all MDS assessments filed from April through September 2019, and the CMI used in July 2020 rates would rely on assessment data from the October through March time period.

The State Budget required DOH to convene a workgroup to make recommendations on the case mix adjustment methodology. The group, which includes LeadingAge NY, several members, and other associations and providers, developed and presented consensus recommendations to the Department that vary significantly from the SPA. The group calls for case mix updates to be frozen at the January 2019 level for the purpose of calculating July 2019 and January 2020 rates, with a transition to a RUG-IV-based model starting in January 2021. More information on the workgroup process and recommendations is available here.

While we, along with other associations, continue to engage with top officials in an effort to mitigate the fiscal impact of July 2019 rates, we urge members to be familiar with the proposed methodology and to model the potential impact on their organization’s Medicaid rate. Please contact us with questions or if we can assist in calculating facility estimates.

Contacts: Dan Heim, dheim@leadingageny.org, 518-867-8383 or Darius Kirstein, dkirstein@leadingageny.org, 518-867-8841